South County healthcare demand driven by perception?

If Santa Clara County were to purchase Saint Louise Regional Hospital in Gilroy, some in South County worry that such a transaction might drive privately-insured patients farther away for medical care. County staff said they would be determined to keep healthcare at or above current standards for the region in any facility they run.
St. Louise is privately owned by Daughters of Charity Health System, which announced in January it plans to sell all six of its hospitals, including O’Connor Hospital in San Jose. The nonprofit is unable to financially sustain its mission to provide acute care for everyone who walks in the door. The announcement comes in the face of a changing industry that has seen declining federal reimbursements and a diminishing need for overnight, in-patient procedures, according to DCHS representatives.
The County Board of Supervisors in February voted to form a team of staff members to look into the potential purchase of both SLRH and O’Connor Hospital. Board of Supervisors President Mike Wasserman, who represents South County’s district on the board, said that that team is awaiting a confidential information packet from DCHS which is being compiled for interested buyers.
While DCHS’ mission stems from the organization’s religious background and “Vincentian values,” the County strives to serve everyone who needs healthcare at Santa Clara Valley Medical Center out of a general concern for public health.
But some doctors in Morgan Hill who run practices serving mostly privately insured patients say many of those patients already prefer hospitals to the north when they need in-patient care, and even more will flee that way if the County purchases SLRH, a 96-bed hospital.
Pediatrician Mazhar Khan, who runs his practice out of the DePaul Medical Center, said the parents of about 80 percent of the newborns he counts among his patients already choose to have their children delivered at Good Samaritan Hospital in San Jose.
Mazhar Khan said this flight of patients to the north, which started in 1999 when Catholic Healthcare West moved SLRH from the DePaul campus to its current location in Gilroy, is caused more by perception than reality. Khan acknowledged that VMC might be the “best” hospital in Santa Clara County in terms of resources available to perform a wide variety of procedures and care, even if patients sometimes have to wait longer for appointments there.
About 75 percent of Khan’s patients are privately insured, he said. “They think services in San Jose are so much better than ours, which is not always the case. The majority of patients (at VMC) are, unfortunately, indigent and on Medi-Cal. People with private insurance tend to shy away from those places.”
VMC CEO Paul Lorenz noted that County health facilities currently contract with all insurance payers – public or private – “and that’s something we expect we would continue to do.” Lorenz did not comment on any likelihood that the County might acquire SLRH, but he refuted the notion that County healthcare is lower quality than that of privately run hospitals.
“The patients go where they believe they’re getting the best patient care, so patients also select the quality of physicians and staff,” Lorenz said. “(VMC) has some of he best physicians in the field. The quality of care at Valley Medical is on par with, if not better than (other) institutions.”
Furthermore, if the County were to purchase SLRH, its interest would be to “maintain the quality of care they have in their own community,” Lorenz said.
VMC is a 574-bed acute care hospital that saw 75,000 emergency room visits in 2012. The hospital has the only burn center and rehabilitation centers for spinal and brain injuries in the County.
Doctors at the DePaul Medical Center want to see an acute care hospital in Morgan Hill, regardless of who purchases SLRH, according to cardiologist Anu Chirala.
Chirala said almost all of her patients go to SLRH, where the quality of care is generally good, when they need hospital services. But she thinks that would change if the County were to take over the Gilroy facility.
Patients at County hospitals, Chirala said, suffer “very long wait times, and access to specialists is very hard … and they fall through the cracks more often, just waiting for care.”

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